Victoria's Secret is revitalizing its brand with a return of beloved products. (Getty Images)
Is Victoria’s Secret ready for its makeover?
Believe it or not, that change could be in the offing for the lingerie giant long known for its leggy supermodels.
“Everything is on the table, including our brand positioning, marketing and real estate,” said Stuart Burgdoerfer, chief financial officer of parent company L Brands on an earnings call.
Such a sea change can’t come soon enough for the beleaguered behemoth, whose shares fell 18 percent, to $28.42, as management conceded that its pricey bras and panties have been piling up in stores.
Now Columbus, Ohio-based L Brands, which also owns the teen-focused PINK chain, is hoping that boots, bathing suits and sunglasses will bring back customers who have abandoned it over the past several years.
It was a “very important decision to re-enter some businesses” the company abandoned in recent years, Burgdoerfer said on the call.
Swimwear, a $525 million business the company exited in 2016 as part of an effort to refocus on the core lingerie business, is due to return this spring.
The lingerie brand dropped swimsuits in 2016. (iStock)
The absence of swimsuits hurt the company more than it anticipated, said industry analysts, pointing to weak sales in last spring when customers typically shopped for swimwear.
Management is “admitting its mistakes,” wrote Wells Fargo analyst Ike Boruchow who said in a research note that the company may be at the beginning of a “turnaround.”
Victoria’s Secret began selling Ugg merchandise about a month ago, including boots, slippers and sneakers online and plans to bring back eyewear in the coming months as a new CEO takes the reins.
“At the end of the day someone else’s brand is not going to save Victoria’s Secret,” Instinent analyst Simeon Siegel said. “It can help with incremental sales.”
Victoria’s Secret Chief Executive Jan Singer, who resigned last week, will be succeeded by Tory Burch President John Mehas early next year, the company announced Monday.
Mehas has been “involved in and led turnarounds” Burgdoerfer said, adding he has also “served female customers for a substantial part of his career.”
Mehas, former head of Club Monaco, a Polo Ralph Lauren brand, takes over amid a three-year sales decline, including in the most recent quarter, when comparable-store sales fell 6 percent at Victoria’s Secret.
Sales of its $50-plus structured push-up bras have stagnated as customers gravitate toward its less expensive T-shirt bras selling in the mid $20s and so-called illusion bra, which goes for about $32 a pop, Burgdoerfer said.
Meanwhile, PINK, once the company’s growth engine, also is flailing, including a move to new loungewear that was heavily discounted over the past few months.
“We took a risk going into the fall season,” on “bling and embellishments” in the PINK merchandise, Burgdoerfer said. “Customers did not respond to it.”
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